After decisively clearing 1.5500 mark barrier, led by last week’s Conservative Party’s victory in UK general election, the pair on Monday conquered another resistance near 1.5550-60 area, marked by 38.2% Fib. retracement level of the pair’s big downfall from 2014 highs to lows touched in April 2015. On Tuesday the pair extended its momentum and moved and is holding above 200-day SMA resistance. Should the pair continue holding above 200-day SMA, it is more likely to make an attempt towards testing a confluence resistance near 1.5870-80 resistance area, comprising of 50% Fib. retracement level and the upper trend-line resistance of a short-term ascending trend-channel formation on daily chart. Meanwhile on the downside, 200-day SMA near 1.5640-30 area, closely followed by 38.2% Fib. retracement level near 1.5550 level, now seems to protect immediate downside. Only a decisive weakness below this immediate support levels might force the pair towards testing the lower trend-line support of the ascending channel, currently near 1.5350-40 region.
The pair once again managed to hold and rebound from a support confluence near 0.7850 level, consisting of a short-term ascending trend-line and 100-day SMA. The ascending trend-line support, however, seems to constitute towards formation of a bearish Rising Wedge chart-pattern. The pattern, however, would be complete only once the pair decisively weakens below 0.7850 support area, which if broken has the potential to take the pair back towards testing sub-0.7700 support area with the eventual downfall expected to continue towards testing sub-0.7600 strong support area, marking multi-year closing low level. On the upside, immediate resistance remains near 0.8000-20 psychological mark area. A decisive move above this immediate resistance seems to provide some additional near-term boost for the pair towards testing another ascending trend-line resistance, forming part of the possible rising wedge bearish chart-pattern.
The pair’s reversal from 100-day SMA extended and on Monday, the pair decisively broke below the lower trend-line support of a short-term ascending trend-channel, suggesting continuation of the near-term weakening trend. From current levels, should the pair weaken below 0.7300 round figure mark support, it seems to immediately test 2015 daily closing lows support near 0.7270-50 area. Further, a drop below 0.7250 is likely to make room for continuing the downward trajectory back towards testing sub-0.7200 level support, marking 4-year low level tested earlier this year in Feb. and March. On the upside, the ascending trend-channel break point near 0.7400 mark now seems to provide immediate resistance. Any up-move beyond 0.7400 mark now seems to be capped at 0.7450 horizontal resistance, which if conquered seems to pave way for retest of 100-day SMA resistance, currently near 0.7550 level.
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